DECREE LAW NO.

(4) OF 2001

WITH RESPECT TO THE PREVENTION AND PROHIBITION

OF THE LAUNDERING OF MONEY
We, Hamad bin Isa Al-Khalifa, Amir of the State of Bahrain
Having reviewed the Constitution,
And Amiri Order No. 4 of 1975,
And the Criminal Procedure Code of 1966, as amended,
And the Bahrain Monetary Agency Law promulgated by Decree Law No. 23 of 1973, as amended,
And the Commercial Companies Law promulgated by Decree Law No. 28 of 1975, as amended,
And the Penal Code promulgated by Decree Law No. 15 of 1976, as amended,
And the Bahrain Stock Exchange Law promulgated by Decree Law No. 4 of 1987,
And the Law of Commerce promulgated by Decree Law No. 7 of 1987, as amended,
And the Insurance Companies and Organisations Law promulgated by Decree Law No. 17 of 1987, as
amended by Decree Law No. 35 of 1996,
And Decree No. 17 of 1989 on the Ratification of United Nations Convention Against Illicit Traffic in Narcotic
Drugs and Psychotropic Substances, 1988,
And Decree No. 9 of 1995 on the Ratification of the Arab Convention Against Illicit Traffic in Narcotic Drugs
and Psychotropic Substances,
And upon the submission of the Minister of Justice and Islamic Affairs and the Minister of Finance & National
Economy, and
After the approval of the Council of Ministers,
Hereby Decree the following Law:

Article 1
DEFINITIONS
In this Law, unless the context otherwise requires:

“Court” means the High Criminal Court

“Criminal activity” means any activity which is a crime whether in the State of Bahrain or in any other State
“Enforcement Unit” means the Unit empowered to implement the provisions of this Law as defined in
paragraph 4 of Article 4
“Institution” means any natural person, body corporate or other entity constituted or recognized under the
laws of Bahrain whose occupation or business includes the carrying out of any of the activities listed
in the Schedule to this Law
“Relevant entities” means Ministries and Government entities which license, supervise and regulate
institutions
“Proceeds of crime” means property which is derived directly or indirectly, in whole or in part, from any
criminal activity
“Property” means property of every kind, nature and description, whether movable or immovable, tangible
or intangible and shall, for instance, include:
(a) any currency, national or foreign, bills, securities, bonds, negotiable instruments or any instrument
capable of being negotiable including those payable to bearer or endorsed payable to
bearer;
(b) Cash or currency deposits or accounts with any bank, credit or other financial institutions;
(c) works of art, jewellery, precious metals and other items of value;
(d) land, property and any rights attached thereto; and
(e) any thing or object, used in money laundering
“transaction” means any disposition of property including but not limited to purchase, sale, loan, pledge,
gift, transfer, delivery, deposit, withdrawal, transfer between accounts, exchange of currency, loan,
extension of credit, purchase or sale of any stock, bond, certificate of deposit, or use of a safe
deposit box
“transaction record” includes:
(a) the identification records of persons who are a party to that transaction;
(b) details of the transaction including institutions which conducted it;
(c) details of any account used for the transaction
 Article 2
OFFENCE OF MONEY LAUNDERING

2.1 Any person who commits any of the following acts for the purpose of showing that the source of the
property is lawful shall have committed the offence of money laundering:
(a) conducting a transaction with the proceeds of crime knowing or believing or having reason to know or
believe, that such property is derived from criminal activity or from an act of participation in
criminal activity;
(b) the concealment or disguise of the nature, source, location, disposition, movement, rights with respect
of, in or over, or ownership of the proceeds of crime, knowing or believing, or having reason
to know or believe, that such proceeds of crime are derived from criminal activity or from an
act of participation in criminal activity;
(c) the acquisition or receipt or transfer of the proceeds of crime, knowing or believing, or having
reason to know or believe, that the same was derived from criminal activity or from an act of
participation in criminal activity;
(d) the retention or possession of the proceeds of crime knowing or believing, or having reason to
know or believe, that the same was derived from criminal activity or from an act of
participation in criminal activity.
2.2 Any of the following acts shall be deemed to be an act of participation in the offence of money
laundering:
(a) destruction, misappropriation, concealment or forgery or any document which could be used as
evidence in the offence or against the accused;
(b) knowledge of the intent of any person who commits the offence, and provision of any facilities or
information which may assist such person to conceal the offence or escape from
prosecution.
2.3 A person can be punished for the offence of money laundering under this Law even if he is not
convicted in the underlying criminal activity. In this context, "underlying criminal activity" refers to criminal
activity from which the property which is involved in a money laundering offence has been directly or
indirectly derived.
2.4 A person can be separately charged and convicted of both a money laundering offence under this
Law and of an offence constituted by an underlying criminal activity from which the property or the
proceeds, in respect of which he is charged with money laundering, were derived.
2.5 Where an offence of money laundering is committed by a corporate body, every person who, at the
time of the commission of the offence, acted in an official capacity for or on behalf of such body,
shall be guilty of that offence if the offence was committed by the intentional conduct or gross
negligence of such person.
2.6 OFFENCES RELATED TO THE OFFENCE OF MONEY LAUNDERING
A person who commits any of the following acts shall have committed an offence related to money
laundering:
(a) failure to disclose to the Enforcement Unit any information or suspicion acquired in the course of that
person’s trade, business, profession, employment or otherwise regarding the offence of
money laundering;
(b) failure or refusal to follow or obstruction or hindering of any order issued by the Enforcement Unit or
issued at its request by the Investigation Magistrate pursuant to investigation of the offence
of money laundering;
(c) disclosure of any information or suspicion acquired in the course of that person’s, trade, business,
profession, employment or otherwise regarding the issue of an investigation order or
attachment order in a money laundering offence, where such disclosure is likely to prejudice
the investigation.

Article 3
PUNISHMENTS

3.1 Any person committing, attempting or participating in a money laundering offence shall be liable to
imprisonment for a period not exceeding seven (7) years and a fine not exceeding Bahrain Dinars
One Million (BD 1,000,000/-).
The punishment shall be imprisonment for a period of not less than five (5) years and fine of not less than
Bahrain Dinars One Hundred Thousand (BD 100,000/-) in any of the following cases:
(a) the accused has committed the offence through an organised criminal gang;
(b) the accused has committed the offence by using his power or influence through an institution;
 (c) the accused has committed the offence for the purpose of disguising the source of the proceeds which
are derived from criminal activity to appear as of a lawful source.
3.2 Without prejudice to the rights of bona fide third parties a person convicted of the offence of money
laundering shall in addition to the punishment prescribed, be liable to confiscation of property which
is the subject matter of the offence, or any other property owned by him or by his spouse or his minor
children, equivalent in value to the property which is subject matter of the offence.
The Court shall order the confiscation of such property on the extinction of the criminal proceedings due to
the death of the accused provided that his heirs are unable to establish the lawful source thereof.
3.3 In cases where the offence of money laundering is committed by a corporate body and
notwithstanding the liability of any natural person, the corporate body shall be liable to the
punishment of a fine prescribed in this Law in addition to confiscation of the property which is the
subject matter of the offence.
3.4 Any person who commits any of the offences related to money laundering shall be liable to
imprisonment for a period not exceeding two (2) years and/or a fine not exceeding Bahrain Dinars
Fifty Thousand (BD 50,000/-) or both.
3.5 Any person who contravenes the provisions of Regulations and Ministerial Regulations issued under this
Law shall be liable to imprisonment for a period not exceeding three (3) months or a fine not
exceeding Bahrain Dinars Twenty Thousand (BD 20,000/-) or both.
3.6 The provisions relating to extinction of criminal proceedings and prescription and limitation of
punishments under the Code of Criminal Procedure or any other Law, shall not affect the
punishments prescribed under this Law.
3.7 Any of the accused who reports a money laundering offence to the Enforcement Unit before such
offence is known to the Enforcement Unit shall be exempted from the punishment prescribed under
this Law. Where the accused reports the offence after it is known to the Enforcement Unit, his report
shall lead to arrest or the other accused persons and attachment of property.

Article 4
THE POLICY COMMITTEE FOR THE PREVENTION AND PROHIBITION OF MONEY
LAUNDERING

4.1 The Minister of Finance and National Economy shall in co-ordination with the relevant entities appoint a
policy committee for the prevention and prohibition of money laundering.
4.2 The Committee shall in particular exercise the following powers:
(a) formulate policies and procedures to regulate the business of the Committee;
blish general policies with regard to the prevention and prohibition of money laundering;
(c) in co-ordination with the relevant entities, issue guidelines on the reporting of suspicious
transactions;
(d) Study regional and international developments in the field of money laundering for the purpose of
recommending updates to the guidelines and changes to the Law when necessary;
(e) Co-ordinate with the relevant entities for the implementation of the United Nations Convention and the
Arab Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances.
4.3 The Committee in discharging its functions may seek the assistance of such entities as it may determine
necessary.
4.4 The Minister of Interior shall appoint the Enforcement Unit, which shall have the following powers:
(a) Receipt of reports on money laundering offences and related offences;
(b) Conducting investigations and compiling evidence in money laundering offences and related offences;
(c) Implementing procedures relating to international co-operation under the provisions of this Law;
(d) execution of decisions, orders and decrees issued by the competent courts in money laundering
offences and related offences.
4.5 The relevant entities shall in co-ordination with the Enforcement Unit issue instructions on procedures to
prevent and prohibit money laundering including the following:
(a) regular reports from institutions on suspicious transactions;
(b) institutions reporting on suspicious transactions;
(c) institutions establishing the identity of the customers and the beneficiaries of customers and verification
of that identity;
(d) internal reporting requirements of institutions.
4.6 Public Prosecution shall be responsible for conducting proceedings relating to money laundering
offences and related offences before the Courts.
 Article 5
INSTITUTIONS

An institution shall:
(a) keep for a period of five (5) years after the relationship has ended a copy of the evidence of identity of
each client as may be provided for in the regulations made pursuant to this Law;
(b) keep a transaction record of any new or unrelated transaction for a period of five (5) years after the
termination of the transaction so recorded;
(c) report to the Enforcement Unit and the relevant entities any transactions suspected by the relevant
officer by reason of the identity of the persons involved, the nature of the transaction or any
other circumstances;
(d) provide the Enforcement Unit with such further information or assistance as the Enforcement Unit may
request;
(e) comply with the instructions of the relevant entities regarding developing and applying internal policies,
procedures and controls including the designation of compliance officers at management
level to combat money laundering and develop audit functions to evaluate such policies,
procedures and controls;
(f) co-operate with any Government entity including the Enforcement Unit;
(g) develop and apply a procedure to audit compliance with the provisions of this Article;
(h) not open or keep any secret, fictious, or anonymous accounts.

Article 6
INVESTIGATIONS PROCEDURE

6.1 Where the Enforcement Unit has evidence that a person has committed or attempted or participated in
committing a money laundering offence, it may obtain an order issued by the Investigation
Magistrate authorising any of the following actions:
(a) requiring the accused or any other natural or corporate person to deliver up any documents or records
or papers or to provide any information which is requisite for the investigation;
(b) entry into public or private premises for the attachment of any documents, records, papers or objects
which are requisite for the investigation;
(c) attachment and freezing of any property which is subject to confiscation in accordance with the
provisions of this Law;
(d) prohibition of the transfer of such property.
6.2 The Enforcement Unit may order the attachment of the property related to the offence in order to
prevent its disposal, provided that the Investigation Magistrate shall be notified within three (3) days
of the issue of the said order.
Any interested party may appeal to the competent Court from any order issued pursuant to the preceding
paragraph within fifteen (15) days of the date of issue of the order.
The ruling of the Court in the appeal shall be final until the criminal case is adjudged or disposed of.

Article 7
SECRECY OF ACCOUNTS AND RECORDS

On the coming into force of the provisions of this Law, no institution can plead before the Investigation
Magistrate or the competent Court, secrecy or confidentiality in respect of accounts, identification of
customers or record keeping provided under the provisions of any Law.
 Article 8
REQUEST OF ASSISTANCE FROM FOREIGN STATES
8.1 Where a foreign State makes a request for specific information relating to suspicious transactions,
persons and corporations involved in those transactions or the investigation or prosecution of a
money laundering offence, the Enforcement Unit shall execute the request or inform the foreign
State making the request of any reason for not executing the request forthwith or of any delay in the
execution of the request.
8.2 The Enforcement Unit, in response to a request from a foreign State, may obtain from the Investigation
Magistrate an order for the following:
(a) a warrant to search any premises or persons for attachment of any document, material or thing;
(b) any document or object relevant to identifying, locating or quantifying any property or identifying or
locating any document necessary for the transfer of any property in either case belonging
to, in the possession of or under the control of any person the subject of the request be
delivered to the Enforcement Unit in addition to information relating to any transaction
conducted by or for such person during such period as the Investigation Magistrate directs;
(c) attachment of any property of or in the possession of any person named in the request for the period
specified in the order, and the management or disposal of that property for the purpose of
determining any dispute as to the ownership of or other interest in the property or any part
thereof, and payment of any costs.
8.3 The Enforcement Unit may, upon request from a foreign State accompanied by an order issued by a
court of the requesting State directed to any person within the jurisdiction of Bahrain to deliver
himself or any document or material in his possession or under his control to the foreign State, for the
purposes of conducting investigations in that State, obtain a Court order directed to that person in
the same terms as in the order accompanying the request.
8.4 The Investigation Magistrate shall take the evidence of the person referred to in the foregoing
paragraph of this Article, and the Enforcement Unit shall transmit the record of such evidence to the
foreign State.
8.5 The Enforcement Unit may, in respect of any proceedings for a money laundering offence, obtain an
order from the Investigation Magistrate to any person resident in a foreign State to deliver himself or
any document or thing in his possession or control, to the Investigation Magistrate or, subject to the
approval of the foreign State, to the competent court in that State.
8.6 The Minister of Justice and Islamic Affairs may order that the whole or any part of any property
confiscated under the provisions of this Law, be given to or shared with a foreign State.

Article 9
EXCHANGE OF INFORMATION

9.1 The Enforcement Unit and the relevant entities in the State of Bahrain may exchange information of a
general nature regarding the offence of money laundering with competent authorities in foreign
States.
9.2 The Enforcement Unit shall in response to a reasonable request from a competent authority in a foreign
State provide to that competent authority specific information relating to suspicious transactions or
persons and corporations involved in those transactions or the investigation or prosecution of a
money laundering offence.

Article 10
MISCELLANEOUS PROVISIONS

10.1 Where an order for attachment of property is issued the Investigation Magistrate may make an order
providing for the payment of moneys to the person named in the request for the reasonable
subsistence of that person and his family.